Electricity Cost Spikes Threaten Job, Economic Growth

Connecticut businesses across a range of industries are reporting significant electricity cost spikes this summer, largely driven by increased state-mandated public benefits charges.

Businesses saw July electricity delivery charges soar as much as 60% over the previous month, despite—in most cases—little change in usage. For instance:

• A plastics manufacturer with locations across the U.S. saw the delivery portion of its Connecticut electric bill soar 57% to $62,172 in July, for almost identical usage as June.
• A Hartford County nonprofit was hit with a $13,666 bill for partial July use, a 58% jump over June despite similar electricity usage.
• The public benefits section of a Hamden manufacturer’s July bill increased 60% over June.
• The electricity delivery charge for a mid-sized Watertown manufacturer jumped 44% to $18,632 in July.
• Delivery costs surged 31% in July over the previous month—for similar usage—for a Naugatuck Valley technology company.
• Partial month delivery costs—for similar usage—increased 22% for a Tolland County manufacturer.
• A Windham County manufacturer reported a 23% increase over its June bill—for just nine days of power use—again with similar usage.

Residential electricity customers were also hit with a sudden spike in their monthly bills, with a petition calling for lawmakers and regulators to act drawing tens of thousands of signatures in a matter of days.

Public Benefits Charge

Connecticut already has some of the highest energy costs in the country, with this latest hike in electric bills expected to further impact the state’s high living and business costs.

While increased usage during the hot, humid summer months is a key factor in higher residential and commercial electricity bills, state energy policy is also driving this new round of cost spikes.

Public benefits charges represented up to 60% of residential and commercial electricity bills in July.

Utilities are required to collect that charge, which represents state-mandated fees for energy efficiency programs, solar and electric vehicle incentives, financial aid, and purchasing renewable and carbon-free electricity.

Public benefits charges represented up to 60% of residential and commercial electricity bills in July.

The charge is established by the Public Utilities Regulatory Authority, which approved the latest increase—scheduled to last 10 months—to cover a shortfall of hundreds of millions of dollars after it set the public benefits rate at zero in 2023.

Tom Guerra, vice president and director of operations for CBIA Energy Connections, which provides energy purchasing solutions for thousands of business accounts, said that like residents, businesses were also shocked by higher public benefits charges.

“When a company locks in an energy price for 36 months, they know exactly how much to build into their product pricing for energy over the next three years,” Guerra said.

“When an unanticipated expense appears, such as this dramatic escalation in public benefits costs, it blows out their whole costing model and they often find themselves losing money on their production.”

Economic Consequences

Connecticut energy costs soared 54.6% between 2013 and 2023, one of the largest increases of any state. National energy costs increased 26.3% over the same period.

Chris Davis, who leads CBIA’s public policy team, said those ongoing cost increases and the latest electric bill spikes reflected “two decades-plus of uncertain, unpredictable energy policy.”

“Unchecked energy prices and unpredictable swings make Connecticut’s situation more volatile and harmful for businesses, particularly small businesses,” Davis said.

“That has a very negative impact on our ability to retain and attract businesses, with significant consequences for economic growth and job growth.”

Davis said high energy energy costs were “a real factor” for companies making decisions about investing in Connecticut.

“We also face decades of rising demand and it’s absolutely crucial that energy policy takes a long-term, sustainable approach to ensuring a reliable, affordable supply of electricity,” he said.

“There has never been a greater need for providing predictable, stable rates, especially when rates are already so high.”

Energy Policy

Davis said he expected energy costs to be a major talking point during fall election campaigns for the General Assembly, with all 187 seats in the state legislature on the ballot.

“CBIA has long advocated for resolving the flaws in the state’s energy policies to lower costs and improve reliability,” he said.

“We cannot afford to continue on a path of unpredictability and uncertainty—developing and implementing meaningful solutions will be a major focus of our advocacy in the 2025 legislative session.”

“Every aspect of Connecticut’s energy policy needs to be examined and reformed.”

CBIA’s Chris Davis

Davis added that CBIA next month will release its strategic economic competitiveness plan, a long-term roadmap for retaining and attracting investment and talent, fostering innovation, and growing a vibrant economy.

That plan includes specific policy recommendations supporting a sustainable expansion of energy sources and improved collaboration and partnerships between the public and private sectors.

“Every aspect of Connecticut’s energy policy needs to be examined and reformed,” Davis said.

“We must work collaboratively to develop and implement solutions that meet the long-term needs of our residents and our economy.”

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For more information, contact CBIA’s Pete Myers (860.244.1921).